In the short run,a firm will maximize profits if it increases output when marginal revenue is greater than marginal cost.

Question

Quizplus · Accepted Answer

This statement is true according to the profit-maximizing rule in the short run, where a firm should produce additional units as long as the extra revenue generated by those units (marginal revenue) is greater than the extra cost of producing them (marginal cost). This is because the firm can increase profits by selling additional units at a price higher than their cost of production.

In the Short Run,a Firm Will Maximize Profits If It